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Do you stop trading when ahead?


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Do you stop trading when ahead?

  #11 (permalink)
 
Rrrracer's Avatar
 Rrrracer 
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michaelleemoore View Post
I come to the market every day looking to do better. I don't mean make more money. I mean be better, be more observant, make better choices, find a new way to see the data that's presented. I don't always succeed, but if I look back at where I was two years ago and where I am today, it's easy to see the improvement. When a day like today develops, my mind does NOT go into preservation mode as it did when I first became profitable; instead, it eyes a record day. Maybe today's the day. Only I can stop myself, so I buckle down and try even harder.


Inspiring. Thanks a lot man.. and congrats on your great day!

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  #12 (permalink)
 bbilotta 
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So, as i'm finding out, posting here is often very cathartic. Thank you all for the thoughts, much appreciated.

As I thought more and more about my question, and read your answers, it became clear the question itself was "fear based", and the actual need to ask the question is what needs to be addressed much more so than the answer.

Look, why am I asking if I should stop. Am I actually asking people who know absolutely nothing about my trading style, context, or personality if I should stop trading for the day and expecting a logical answer? I'm asking because i want to remove that emotion i felt. The Fear of losing. Fear of Missing Out. The question itself is a sure sign that I am still preoccupied with "making money" in the market and controlling the outcome.

Truly, thank you all for chiming in and apologies for the public self-flagellation. LOL

Given my "Big-Brain" approach to almost everything the answer became clear to me. I need to remove myself from that decision making process. I need to do more homework to see what my plan actually yields over time and then base the go-forward plan on those results. I suspect I will find that once I hit a certain point I will enact a trailing stop on the day.

Example: I win the firs three, take the fourth, if I lose I'm done for the day. If I'm up "X", I can give back "Y"... 20%, 30%..... I'll find the answer, put it into the plan, take emotion out of play and DO MY JOB!!

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  #13 (permalink)
 
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 xevanchan 
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I always stop when I'm ahead, I did it today and there were several more opportunities to make good trades that I didn't take. I don't know why, maybe I'm lazy or I do worse afterwards; maybe both.

I think it's a bad habit though; I find that when I'm down, I keep trading, usually on a day thats not ideal for trading. I feel like the days where I stop when I'm ahead usually end up providing better entries opportunities; I think I should stop when I'm behind and keep going when i'm ahead; sounds kinda counter intuitive but I think thats what would be ideal for me. I'm also in a better mindset when i've been winning rather than losing.

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  #14 (permalink)
 bbilotta 
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Continuing my thought process on this subject i'm more convinced that this is purely fear.

This is a performance industry. Unfortunately every move we make is directly linked to money, and we all know the human psychological reaction to money.

If a baseball player steps to the plate and gets a hit, does he tell his coach he's not going to bat next time up because he's afraid he'll strike out? Absolutely not. He steps to the plate next time up expecting another hit.
But lets flip the table a little bit on that hitter. Let's say he earns $500 for a base hit, $1,000 for an extra-base hit, and $2,000 for a home run. And let's say he has to pay back $750 if he makes an out. Walks are a scratch, no money either way.

How do you think he'd feel next time he came to the plate?

That's the world we've chosen to try to exist within.

As hard as it is, we MUST separate ourselves from the fact that every execution we make results in either dollars lost, or earned. For in doing that we can simply focus on the job directly in front of us at that very moment.

I'm not stopping my trading day because i'm up. I'm not even going to think about things in those terms any longer.

If we were ball players we'd stop when we are benched. We can bench ourselves if we are out of tune with the market, unable to focus, or find our approach is simply not aligned with the market at this time. Those are valid, and logical reasons to stop.

Your daily stop loss should be based on your current account size, OR your defined research that tells you what you can expect your largest loosing day draw down is. If you've a $100K+ account, and your collection of trade data tells you your largest draw down is $2,000, or that your "median" draw down on a losing day is $XXX.xx, then that's your daily stop loss. It should be pragmatic, and cemented and not subject to interpretation.

Your daily stop loss, and stopping for the day SHOULD NOT, IMO, be based on anything that resembles an emotional barometer - which is what my original post was.

If my data tells me I can expect to earn 2 ticks per trade for a 2-lot, then that's what I expect to happen over time until my data tells me otherwise. I look at the past week, the past 30, 60 and 120 days. I want those numbers to fairly consistent over that time. I don't want to focus on "today", or this next trade. I have to focus on "What is the market trying to do? how good a job is it doing? What is my next setup? Where's my entry? Where's my stop?

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Last Updated on May 13, 2019


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